IMPACT OF ORGANIZATIONAL CHANGE ON THE PERFORMANCE

Pinnacle Research Journals 16 IMPACT OF ORGANIZATIONAL CHANGE ON THE PERFORMANCE ABSTRACT ANIL KUMAR S. HAGARGI*; DR. SHIVKUMAR DEENE** *Research Scholar, Department of Studies & Research in Management, Gulbarga University, Gulbarga, India. **Assistant Professor, Department of Commerce, School of Business Studies, Central University of Karnataka, Gulbarga, India. Today organizational change is pervasive as organization strives to adapt or decline in uncertain business environment of global economic and political world, with many robust forces in the environment in the form of competition, technological advancement to name a few shape the process of organizational adaptation. The organization may go the side of redesign in the form of restructure, role and responsibility, may shift focus or deviate. The paper aims to know that how change process can impact the performance of employees and organization at large and people s commitments in accepting change as a tool for success of the company. Change management is first analyzed from an individual perspective and from the organizational perspective and has become inevitable and a mantra for survival and success of an organization. The paper also puts glimpses on the role of leadership in managing change and establishes the key steps taken by the leader during change process to ensure effective implementation. Change is a stepping stone for transformation of an organization as we cannot keep it stagnant in the pace of competition and the era of changing global environment. The biggest challenge for any management is to convey each and every employee of organization the idea of transformation and seek their acceptance as majority of the people resist to change. The paper also puts light on the role of HR in change Management & effect of change on organizational culture. INTRODUCTION Change management has been defined as the process of continually renewing an organization s direction, structure, and capabilities to serve the ever-changing needs of external and internal customers (Moran and Brightman, 2001: 111). According to Burnes (2004) change is an everpresent feature of organizational life, both at an operational and strategic level. Therefore, there should be no doubt regarding the importance to any organization of its ability to identify where it needs to be in the future, and how to manage the changes required getting there. Consequently, organizational change cannot be separated from organizational strategy, or vice versa (Burnes, 2004; Rieley and Clarkson, 2001). Due to the importance of organizational change, its management is becoming a highly required managerial skill (Senior, 2002). Graetz (2000: 550) goes as far as suggesting Against a backdrop of increasing globalization, deregulation, the rapid

Pinnacle Research Journals 17 pace of technological innovation, a growing knowledge workforce, and shifting social and demographic trends, few would dispute that the primary task for management today is the leadership of organizational change. Since the need for change often is unpredictable, it tends to be reactive, discontinuous, ad hoc and often triggered by a situation of organizational crisis (Burnes, 2004; De Wit and Meyer, 2005; Luecke, 2003; Nelson, 2003). Although the successful management of change is accepted as a necessity in order to survive and succeed in today s highly competitive and continuously evolving environment (Luecke, 2003; Okumus and Hemmington, 1998), Balogun and Hope Hailey (2004) report a failure rate of around 70 per cent of all change programmes initiated. It may be suggested that this poor success rate indicates a fundamental lack of a valid framework of how to implement and manage organizational change as what is currently available to academics and practitioners is a wide range of contradictory and confusing theories and approaches (Burnes, 2004). Guimaraes and Armstrong (1998) argue that mostly personal and superficial analyses have been published in the area of change management, and according to Doyle (2002) there is even evidence to suggest that with only a few exceptions existing practice and theory are mostly supported by unchallenged assumptions about the nature of contemporary organizational change management. Edmonstone (1995: 16) supports this observation when stating many of the change processes over the last 25 years have been subject to fundamental flaws, preventing the successful management of change. Even though it is difficult to identify any consensus regarding a framework for organizational change management, there seems to be an agreement on two important issues. Firstly, it is agreed that the pace of change has never been greater then in the current business environment (Balogun and Hope Hailey, 2004; Burnes, 2004; Carnall, 2003; Kotter, 1996; Luecke, 2003; Moran and Brightman, 2001; Okumus and Hemmington, 1998; Paton and McCalman, 2000; Senior, 2002). Secondly, there is a consensus that change, being triggered by internal or external factors, comes in all shapes, forms and sizes (Balogun and Hope Hailey, 2004; Burnes, 2004; Carnall, 2003; Kotter, 1996; Luecke, 2003), and, therefore, affects all organizations in all industries. While there is an ever-growing generic literature emphasizing the importance of change and suggesting ways to approach it, very little empirical evidence has been provided in support of the different theories and approaches suggested (Guimaraes and Armstrong, 1998). Although important changes have been observed across the globe are TQM, Business process reengineering (BPR) etc are witnessed that rapid pace of industrialization and globalization have forced the organization to accept the change to stay in the fray of competition and to progress as a unit. EFFECT OF CHANGE MANAGEMENT ON PERFORMANCE OF EMPLOYEE In the context of business operations, change management affects the performance of employees during and after change. During the change process, the behavior of the employees is greatly impacted upon through emotional responses. When the issue of change is introduced to the employees, they tend to fear. They often assume a defensive and resistant role. It's important to note that employees do not perceive change positively. It interferes with their routine activities and they are subjected to a deviation from what they are used to doing. They feel threatened and insure. This brings about mental and emotional instability, often implicating on their performance. During the implementation of change, the employees are noted to have negative feelings and they 'scrabble' about in finding how to cope with the effects of change. The resistance which is displayed is deeply rooted in pre-conditioned and routine subjection that the employees are previously exposed to within the work environment.

Pinnacle Research Journals 18 Managing change affects the employees in the sense that during the implementation, the workers' concentration is reduced as they conform to the change. Much of their time, efforts, creative thinking and intellectual capacity are interfered with. They register a decreased performance due to lack of an initiative and stress free environment. This is however, expected by the management and it should be a temporary feature as the workers are soon able to cope with the change and assume their normal performance. It nonetheless depends on how soon the management is able to win their support and acceptance to change. Due to the subjective feeling of the employees, they may alt their responsibility to deliver to the required standards as they begin to portray resistance to change. This has a negative impact on the quality of products, their efficiency and effectiveness. The company is subjugated in increased operational costs, reduced product quality, which in turn impacts on the sales volumes. The profitability may be reduced. The customers buying behavior may also be affected often showing a reduced buying behavior. In extreme cases, depending on the magnitude of the change, key employees who feel threatened and disturbed by the change, may opt to exit the company. In deals the company a 'blow' in the sense that unexpectedly, productive employees are lost without any mentorship process and this creates a gap within the workforce which has to be sealed. However, as the process rolls forward, the employees become acclimatized and begin to withstand the change. During this time, they realize that indeed the change is a positive venture. They wholly begin to accept it and live with it. They presume their effectiveness and efficiency in production and the business gets back to productivity and profitability track. After the change process, the new strategies, structural features, technological innovations and acquired behavioral changes are expected to realize good results. The company eventually and exponentially improves its productivity and profitability. In fact the registered losses and damages that are seen during the change-initiation period may be recovered in a short period. The process of production is accelerated, efficiency is improved, effectiveness is promoted and sales volume increases significantly sending the company back to growth potentiality. EFFECTIVE CHANGE MANAGEMENT As is true with many concepts used by strategic HR professionals, the components of effective change management are not terribly difficult to comprehend rather the difficulty lies more within implementation TYPES OF CHANGE MANAGEMENT As an organization begins the process of developing a change management strategy it is important to recognize that research has determined that there are different types of change. Price & Chahal (2005) discuss Johnson and Scholes research on change. Johnson and Scholes describe two main types of change: crisis change and chosen change. Crisis change is typically a reactive response to some type of external factor or fear of failure. Chosen change describes a more proactive approach taken by employees within an organization that are trying to drive

Pinnacle Research Journals 19 success (ibid). Price & Chahal (2005) also highlight Pritchett and Pound s research on three primary components of ORGANIZATIONAL CHANGE Developmental change, transitional change, and transformational change. Developmental is defined as doing more of, or better than, what currently exists. Transitional is, implementation of a new desired state requiring dismantling existing new ways. Transformational is, implementing an evolutionary new state, requiring major and ongoing shifts in organizational strategy and vision. When designing a change management initiative research suggests that how different types of change are defined is not as important as considering the complexity level of the change in your initiative. EFFECTIVE CHANGE FUNCTIONS Upon reviewing research on how to implement effective change management it is clear that different functions have been highlighted over the years. Schmidt and Jackson (2005) highlight leadership functions in their study that are needed to successfully navigate the paradoxical opposites faced during everyday organizational change. The functions they list Are as follows: Ability to balance short-term and long-term focus. Ability to increase quality and lower costs. Ability to improve speed and accuracy. Ability to be adaptable and be consistent. Ability to secure individual engagement and hold fast to a larger company vision. Ability to balance the competing needs of employees and customers and stockholders. Guy & Beaman (2005) believe the main component of effective change management is creating an initiative that is sustainable. Functions they list for sustainability are: The ability to identify resistance, redundancies, and inefficiencies as well as knowledge of the best approaches to alleviate these issues. The ability to set clear steps for the change process and facilitate the process to make certain every step is taken. The ability to build and maintain relationships among employees impacted by the change initiative to ensure their engagement in the process.

Pinnacle Research Journals 20 STRATEGIES FOR CHANGING ORGANIZATIONAL CULTURE Culture is the essence in the operation of organization in different environmental conditions the pattern of activities attitude and behavior shaped by a shared set of values and beliefs. It is not just an exercise to create new strategies and process to accomplish the mission of the company. It also evaluates the existing culture of the organization might influence positively or negatively the change that needs to take place and working to adjust the culture which supports change. Organization culture is not an easy task as commitment of people plays an active role in implementing any strategic change in an organization. Changing culture is not simple as identifying the new behaviors you want to see and articulating a new set of values and belief associated with it. MANAGING CHANGE IN THE WORKPLACE Managing change in the workplace is a constant for all leaders. To remain relevant as a business you must regularly redefine your way of operating, your product/service offerings and the impact you have on your customers and broader community. For most people, any change is uncomfortable. Therefore, when managing change in the workplace, it is your job is to help people see that whatever they've been doing in the past can no longer take place. That neither they, nor the business, will be relevant without change. Ignite a fire of urgency to get people willing to move out of their comfort zone and embrace the change. Let them know why the old way is no longer sustainable, by finding compelling and real evidence that people can feel, see and touch that change must happen and happen now. Make sure you have the right people on board (behavior, skills attitudes) to deliver the tomorrow you desire and need. The bigger the change the higher people's emotions will be. You can read more about eight most common responses you'll need to handle along withstrategies for dealing with peoples' emotions. People need to feel that they have control and some say in their destiny. Take that away from them and you'll get resistance. Involve people in the planning and implementation of the change. With participation you open people up to the exciting possibilities contained within the change and they will become a driving force in creating the new bright future HOW DO ORGANIZATIONS IMPLEMENT CHANGES SUCCESSFULLY? Naturally we believe that organizations can learn how to become more effective in implementing major change but have not taken this belief at face value. We have actively explored how organizations implement changes successfully. In particular, what really interests us in our work is: What were the distinguishing factors between those initiatives that left people resistant, those that helped people accept the change (albeit in a compliant way which is easy to reverse) and those that built real commitment? We are also aware that there is a great deal of theory around about what works. As has been the case for the last 25 years, the world of change management is currently full of all sorts of prophets, evangelists, mice moving cheese and consulting firms

Pinnacle Research Journals 21 with the latest panaceas. We too have our passions, beliefs and experiences that are probably biased. So what we decided to do was create a research framework and ask change agents people who are at the front line of implementing changes in large organizations to analyze and reflect on what had and had not, For the purpose of clarity: acceptance means that people acknowledged that changes were required but they needed to develop new skills or obtain other types of support before they could fully participate. ROLE OF LEADERSHIP IN CHANGE An effective leader is needed to take an organization on the path of prosperity and success leader should lead form the front and by example he/she should have a vision for the outfit and accept change as a tool for success a leader should posses qualities such as forward thinking and visionary and integrated person who binds the organization during the time of change. A leader must know how to properly motivate others; and A leader must be able to lead change and finally, A leader must be able to lead a culture of change. Leading the change is an important task and it is one of the most difficult tasks a leader can face. It is a double edged sword involves risk as well opportunities for many of the leaders managing change initiative is a crucial role but responsibilities can widely vary depending upon the type of the change. The role of a leader in planned change is critical and involves two major responsibilities to be met. 1. Communicating the vision for the change. 2. Establishing the support elements necessary for the change to be successful. CONCLUSION The change is an initiative that every organization has to take to sustain and compete in changing environment and to be flexible in all aspects. The organization and people have to be committed to change process successfully and people should be ready to face change instead of resisting it and take it as positive step to take organization forward and newer height and achieve sustainability and profit. HR initiative is a must to adapt change as many feel that change can cause job insecurity as change may carry advancement of technology as well and have adverse effect on individual performance and organization at large. Change should not impose negative behavior on the workforce. REFERENCES 1. Change Management : Nilikhant 2. Human Resource Management : K. Ashwatappa 3. Management principles and practices : Harold Koontz 4. www.voices.yahoo.com 5. http//www.bridgespan.org 6. http//www.changefirst.com 7. http//www.oppapers.com